Secretarial Service

• The Need and Impact of adoption of Secretarial Standard

Companies follow diverse practices based on differing business cultures and varied usages
over a period of time. The secretarial standards aim at and achieve integrating, harmonizing and
standardizing fine corporate governance practices across all companies. It leads to provide better
monitoring of compliances of law, strengthening the processes of the Board and create confidence
in investors. The ICSI constituted Secretarial Standard Board (SSB) in year 2000, which, includes
representative of Institute of Chartered Accountants of India, Institute of Cost and Work Accountants
of India, different Industrial associations like ASSOCHAM, CII, FICCI.

1) FICCI - Federation of Indian chamber of Commerce and Industry
2) CII - Confederation of India Industries
3) ASSOCHAM - Associated Chambers of Commerce & Industry of India.

There is an elaborate procedure followed while formulating the SS on a subject.
It is note worthy that SSB and its statutory recognition and implementation is unique to India.
It is a quantum leap towards standardization of diverse secretarial practices existing in the corporate
sector.
SS is to be reviewed by SSB once in a year or whenever there is substantial change in the law
which ever is earlier.
The scope of secretarial standards : ICSI has issued total (10) Ten secretarial standards as
stated below -
S-1 : Secretarial Standard on Meetings of the BOD
S-2 : Secretarial standard on General Meetings.
S-3 : Secretarial Standard on Dividend
S-4 : Secretarial Standard on Registers and Records
S-5 : Secretarial Standard on Minutes
S-6 : Secretarial Standard on Transmission of shares and Debentures
S-7 : Secretarial standard on passing Resolution by circulation.
S-8 : Secretarial standard on Affixing common seal.
S-9 : Secretarial standard of Forfeiture of shares
S- 10 : Secretarial standard on Board’s Report

Exemption from SS: 1) SS - 1 and SS- 2 not applicable to OPC as it has only a single director
on its Board.

2) SS- 2 is not applicable also to companies exempted by Central Government by notification.

q Secretarial Audit : u/s 204
I) Meaning:
This is an audit which checks the compliance of various legislations including Companies

Act and other corporate and economic laws applicable to the company,

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II) Importance:

1) It is a mechanism to monitor compliance requirements.
2) It aims at detecting errors, mistakes in compliance mechanism.
3) It prevents the company from the risk and losses due to non-compliances.
4) It gives confidence to regulators, management, stakeholders that company is following a

disciplined approach of evaluation and improve effectiveness, risk management, control
and governance.

III) Applicability of Secretarial Audit : u/s 204(1)
1) Every listed company
2) Every public company with paid -up share capital of ` 50 crores or more,
3) Every Public company with a turnover of ` 250 crores or more,
4) Every private company which is a subsidiary of a public company.

q Appointment of secretarial Auditor :
1) Only member of ICSI holding certificate of practice can conduct secretarial Audit and

furnish the Secretarial Audit Report.
2) This appointment is made by the Board of Directors at their meeting by passing a Board

Resolution.
3) This Appointment should be preferably made in the beginning of the financial year; thus

to make possible checking of compliances on a continuous basis.
4) The secretarial Audit Report : should be in prescribed format viz. form no. MR-3 and to

be annexed with the Board’s Report.

6.2.5 The Chief Financial (Finance) Officer (CFO)
Meaning: CFO is the officer of a company who is responsible for company’s finances.
1) This extends to financial planning, management, financial risks, record keeping and

financial reporting.
2) CFO helps in analyzing and recognizing company’s strengths and weaknesses.
3) This leads to take timely corrective actions with respect to finances of the company.
4) The CFO is responsible for presenting and reporting accurate and timely financial

information of the company.
5) Inputs by the CFO make the basis of the Board Report.
6) CFO is appointed as a regular employee in the rolls of company or may be on contractual

basis for a certain period of time.
7) CFO need not be the Director of the Company.
8) CFO is compulsorily required to sign audited financial statements of the Company.


Activity: Find out the KMP of the following:
1) Reliance Industries Limited
2) Cadbury India
3) Union Bank of India

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6.3 Distinction between:

1. Director and Managing Director

Sr. Points Director Managing Director

No.

1) Meaning Director is the elected Managing Director represents the

representative of the shareholders Board in the day-to-day activities

of the company. of the business.

2) Appointment Is elected at the Annual General Appointed by the Board of
Meeting by the members of Directors.
company.

3) Number of Director can work in 20 A person can be a Managing
Companies companies at a time out of Director of two companies at
which not more than 10 public a time by passing a unanimous
companies resolution by the Board of the
at a time. second company.

4) Tenure a) Directors of public company Appointment of Managing
retire by rotation. Director is made for a term of
five years.
b) 1/3rd Independent Director is
not liable to retirement by
rotation.

c) This post can have maximum
tenure of three years.

5) Positions Director is only a person/member This is a post of dual identity.
Held
on the Board. Managing Director is the Director

on the Board. M. D. is the head of

the management of the company

by being a whole time manager.

6) Remuneration Specific Provision entitles the If more than one managing

directors for remuneration for director is appointed, the

their services. maximum remuneration cannot

The director is given fees to be more than ten percent of net

attend Board Meeting which may profits. M.D. is entitled to either
be upto Rs. 1 lakh plus prescribed a monthly salary or five percent
of net profits.
remuneration.

7) Status Directors are elected As the duties of Managing

representatives of the Director are more than that

shareholders managing company of an ordinary director with

on their behalf. They can be more contribution, efforts and

agents of timewise; M. D. can be treated

the company but not employees as the employee of the company.

of the company.

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2. Managing Director and Whole -time Director

Sr. Points Managing Director Whole-time Director
No.
1) Meaning The managing Director represent The Whole-time Director is a
the Board in day-to- day director who devotes whole time
2) Powers management of the company. to the working of the company.

3) Number of Managing Director is entrusted A whole time director does not
Post with substantial powers of have discretionary powers to take
management. decision on policy matters.

A person can be a Managing A person cannot have whole
Director of more than one -time employment of more than a
company if the Board of second company at a time. so more than
company unanimously approves one whole-time directorship is
his appointment. not possible.

3. Managing Director and Manager

Sr. Points Managing Director Manager

No.

1) Meaning The Managing Director is the The Manager is a person in
representative of the Board as far charge of whole or substantially
as the day-to-days administration whole management of the affairs
of company is concerned. of the company.

2) Power Managing Director is entrusted The manager is entrusted with
with substantial powers of whole or substantially whole
management. powers of management.

3) Position Held The Managing Director must be The manager need not be a

the director of the company. director of the company.

4) Number of A Company may have more than The company can have only one
Posts
one Managing Directors. Manager.

5) Appointment The managing director may Manager is appointed under a
be appointed by virtue of an contract of service.
agreement with company or
resolution passed by company’s
general meeting or Board
meeting or memorandum or
articles of the company.

6) Remuneration In case of more than one Maximum remuneration to a

managing director the maximum manager cannot be more than 5%

remuneration payable would be of the net profit.

10% of the net profit.

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SUMMARY

1) A strong organizational structure is needed in company to take care of its unique feature of
separate ownership and management.

2) The Board of Directors : This is the highest body with extensive powers, comprising of several
Directors who are expert in their fields and appointed as per provisions of the Act.

3) DIN : It is a unique identification number required by every individual who intends to be the
director of company.

4) Role of the Directors : Act in the capacities of
a) Agents of the company (representing the company)
b) Managing partners (Conducting management) and administration for and on behalf of

shareholder and
c) trustees (guarding the interests of the company)

q Key Managerial personnel of company
It consists of

1) The Managing Director
2) The Company Secretary
3) The Chief Financial Officer
4) The Whole Time Director
The KMP strengthens the efforts of Board to assure efficient and lawfully compliant

management of company.

q Secretarial Standard (SS) : It aims at standardizing diverse secretarial practices prevailing
in corporate world. Note worthingly; it is legally adopted in India. There are 10 SSs prepared
and issued.
The SS-1 & SS-2 are approved by the Central Government and mandatory to be observed by
all companies in India.

q Secretarial Audit :
It is the audit which verifies the compliance of different legislations influencing functioning

of the company. A member of institute of company secretaries of India holding a certificate of
Practice can conduct secretarial audit and prepare secretarial Audit Report in form No : MR-3
which is to be annexed to the Board Report.

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EXERCISES

Q.1 A. Select the correct answer from the options given below and rewrite the statements.

1) ........... comprises of a team of Directors.

a) Board of Directors b) Board of Trustees c) Board of Managers

2) ............ can be a director.

a) An Individual b) A Firm c) A Body corporate

3) Up to ............ as maximum directors are allowed to a company.

a) five b) fifteen c) fifty

4) A maximum of ................ Directorships is allowed to a person.

a) two b) ten c) twenty

5) A maximum of .............. Directorships of a public company is allowed to a person.

a) one b) ten c) twenty

6) ................. is a unique identification number required to be a Director.
a) PIN b) DIN c) TIN

7) ....................... powers are the powers given to Board under the Act.

a) Statutory b) Managerial c) Administrative

8) Director represents company in his role as .............. .

a) Agent b) Managing Partner c) employee

9) Managing Director is appointed for a period of ........... years.

a) 5 b) 10 c) 15

10) ................ is required to work under superintendence, control, guidance of the Board.

a) Government b) ROC c) Managing Director

11) ........... is an employee of the company.
a) Alternate director b) Non-executive Director c) Whole-time director

12) ............. need not be a director of the company.

a) Manager b) Managing Director c) Whole-time director

13) .......... needs a whole time director.

a) Listed company b) Partnership c) OPC

14) To provide guidance to Board is ....... duty of company Secretary.

a) Personal b) General c) Statutory

15) Only a member of ........... can be a practicing Company Secretary.

a) ICAI b) ACCA c) ICSI

16) ............. is to be prepared in prescribed form MR -3.

a) Annual Report b) Auditors Report c) Secretarial Audit Report

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B. 1. Match the pairs: Group ‘B’
Group ‘A’ 1) Nominated by the Board
2) Assists and advises the Board
a) Board of Directors 3) Automatic Appointment
b) Managing Director 4) Appointed by ROC
c) Company Secretary 5) Extensive Powers of management
d) First Directors 6) Substantial Powers of management
e) Alternate Director 7) Appointed by Promoter
8) Assists and Advises the Government
B. 2. Match the pairs: 9) Negligible Powers of management
Group ‘A’ 10) Nominated by Council

a) Public company Group ‘B’
b) Private company 1) Arises due to death of Director
c) Secretarial Auditor 2) Collective Powers
d) Casual Vacancy of a Director 3) Individual Powers to Directors
e) Powers of the Board 4) Arises due to additional work
5) Appointed by Managing Director
6) At least 2 (two) Directors
7) At least 3 (three) Directors
8) At least 15 (fifteen) Directors
9) At least 1 (one) Director
10) Appointed by the Board

C. Write a word or a term or a phrase which can substitute each of the following statements.
1) The organization with distinct feature of separate ownership and management.
2) The officer responsible for company’s finances.
3) The body of elected representatives of company.
4) The officer who is statutory and administrative officer and also acts as co-ordinator of the

company.
5) Qualification required to be a Company Secretary.
6) Agents, Trustees and Managing Partners of the company.
7) Audit which checks compliances of different legislations.
8) This KMP signs document of company requiring authentication by company.

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9) The nature of relationship of Director with the company.
10) Name the secretarial standard -1
11) Name the secretarial standard - 2
12) Name the secretarial standard - 3

D. State whether the following statements are True or False.
1) Large number of shareholders necessitates company to have separate managerial body.
2) Maximum number of Directors allowed to a company are 15 (fifteen).
3) A public company should have a minimum of 10 (ten) directors
4) DIN is required for Secretaryship.
5) Executive Director is called as outside Director.
6) Promoter of a company cannot be the Independent Director.
7) Only individuals can be directors.
8) Casual vacancy of Board is filled by the members.
9) To function as per Articles of Association of the company is statutory duty of the Board.
10) A Director is an employee of the company.
11) Managing Director is appointed by a resolution.
12) Minimum and Maximum age to be a Managing Director is 21 and 70; respectively.
13) A company may appoint more than one M. D.
14) Indian companies prefer a Managing Director over a Manager.

E) Find the odd one.
1) Woman Director, Promoter, Executive Director.
2) Absent at Board Meeting, failure to disclose interest, DIN.

F) Complete the sentences.
1) Seperate ownership and management is a unique feature of ............. .
2) Minimum number of Directors for a private company should be ............. .
3) Minimum number of Directors for a public company should be ............. .
4) Minimum number of Directors for an OPC should be ............. .
5) First Directors of a company are appointed by ............. .
6) At least one Woman Director is required by ............. company.
7) Casual vacancy on Board is filled by ............. .
8) Director is the guardian of interest of company as ............. .
9) First Secretary is appointed by ............. .
10) The audit which checks the compliance of Companies Act is called as ............. .

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G) Select the correct option form the bracket.

Group ‘A’ Group ‘B’
1) Rotational Director ----------------------------
2) ---------------------------- Alternate Director
3) Woman Director ----------------------------
4) ---------------------------- First Director

(Every Listed Company, Appointed by Promoters, Appointed in place of a Director who is
absent, Retire by rotation)

H) Answer in one sentence.
1) Who is the officer responsible for the Company’s financial plan?
2) What is the importance of Secretarial Standards?
3) Who provides guidance to the Board of Directors?
4) What is the tenure of ‘Managing Director’?

I) Correct the underlined word and rewrite the following sentences.
1) Public company must have minimum 15 Directors.
2) First Directors are appointed by ROC.
3) Secretarial Standards are given by the Companies Act, 2013.

Q.2 Explain the following Terms / Concepts. 2) Managing Director
1) Director 4) Executive Director
3) Independent Director 6) Alternate Director
5) Non Executive Director 8) Chief Financial Officer
7) Casual vacancy of a Director 10) Secretarial Standard
9) Company Secretary 12) The Board of Directors
11) Secretarial Audit

Q.3 Study the following case/situation and express your opinion.
1) Mr. A is a commerce graduate. He has vast experience in the field of finance and financial

market. He wishes to become director of PQR co Ltd.
a) Is he required to obtain DIN?

b) Can PQR Co. Ltd. object to his directorship on lack of specialized qualification?

c) If he is appointed as director of PQR Co Ltd, is he entitled to remuneration?

2) Mr. Z is a member of Institute of Company Secretaries of India.

a) Can Mr. Z be appointed as pro-tem Secretary of LMN Ltd. which is under formation?

b) Can Mr. Z work as secretarial Auditor?

c) Mr. Z wishes to be employed as whole time Secretary in companies ABC Ltd. and
OPC Ltd. Is he allowed?

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3) Mr. M wishes to be the Managing director of QRS Ltd.
a) The age of MR. M is 30 years. Can he be appointed as MD of a company?
b) Is it necessary that Mr. M should be one of the directors on the Board of QRS Ltd.?
c) For how long a period QRS Ltd. can appoint Mr. M. as Managing Director?

Q.4 Distinguish between the following.
1) Director and Managing Director
2) Managing Director and Manager
3) Managing Director and Whole Time Director

Q. 5. Answer in brief.
1) What is DIN?
2) State any four powers of Board of Directors.
3) Mention any four ways in which the office of a Director becomes vacant.
4) State any four powers of Managing Directors.
5) State the Statutory duties of a company Secretary.

Q.6 Justify the following statements.
1) Directors are Managing Partners.
2) A Director is an agent of the Company.
3) Company has a distinct feature of separate ownership and management.
4) DIN helps investors of the company.
5) Directors have to work as a team.
6) Directors play a triple role.
7) Company Secretary plays a triple role.
8) A Director cannot be called employee of the company.
9) Managing Director has substantial powers of management.
10) Indian companies prefer to appoint a M. D. than Manager.
11) Pro-tem Secretary is helpful to the company.
12) Secretarial Standards should be in conformity with the Act.
13) Secretarial Standards leads to better legal compliance.
14) Secretarial Audit is required under the laws.

Q.7 Answer the following questions:
1) Explain the Role of Directors.
2) Explain the duties of Director.
3) Explain the Managing Director.
4) Explain the Company Secretary.
5) Explain the Role of Company Secretary.

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7 COMPANY MEETINGS - I


7.1. Essentials of valid meeting

7.1 1. Properly convened 7.1 2. Properly constituted

1. Proper authority 1. Quorum

2. Notice 2. Chairman

3. Agenda

7.1 3. Properly conducted 2. Motion 3. Voting
1. Proxy 5. Minutes
4. Resolution

7.2 Distinction

INTRODUCTION:
Joint stock company is very popular form of business organization. It’s members are large in

number. Members are treated as owners of the company but they are scattered over wide areas and
have their own business hence they cannot practically manage the daily company affairs Under such
circumstances it becomes necessary to make separation of ownership from management.

Meeting is the best form of oral or face to face communication of members and management
in the company. Members and directors come together, discuss company related matters, exchange
ideas, opinions, determine the business plan and policies and take collective decisions at a meeting.

In short company meetings are necessary for the purpose of discussing various issues relating
to the company and arrive at decisions.

Meaning and Definition:
The term meeting is derived from the Latin word ‘Maeta’. Maeta means ‘face to face’.

Meaning:
A meeting may be defined as gathering or assembling of two or more persons for transacting

any lawful business.

Definition:
According to Show & Smith “Company Meeting is an assembly of people connected with the
company who have gathered for the purpose of discussing matters related to it.”

In short company meeting is an official gathering of Shareholders, Directors, KMPs and / or
Creditors for discussing different issues relating to the company and arrive at decisions.

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Importance of company meetings:

1) Opportunities for members to come together:
A meeting provides an opportunity for members to come together and discuss about the

working of the company.

2) Minutes of the previous meeting:
Minutes of the previous Board and Committee meeting are read out by the Secretary which

enables the members to get a clear idea about the matters discussed in the previous meeting.

3) Fixation and implementation of policies, plans and programmes:
The management chalks out the policies, plans, programmes and decides ways and means of

its implementation in the meeting.

4) Analysis of problems:
The nature of problems can be discussed and analyzed in the meeting and it becomes easy to

arrive at a solution.

5) Legal requirements:
Meetings are to be held according to the provisions of the Companies Act. Legal formalities

related with convening and conducting various meetings of the company are fulfilled by
conducting meetings.

6) Other elements:
Meetings are essential to make the appointment of directors, and auditors, declare the dividend,

study and give approval to annual report, financial statements, auditors report etc.

7.1 ESSENTIALS OF VALID MEETINGS:
Meetings play a very vital role in management of a joint stock company, as most of it’s decisions

are made at the company meetings. The business transacted at these meetings must be valid. A
meeting becomes valid when it is duly convened, properly constituted and properly conducted
in accordance with the provisions of the Companies Act and the Articles of Association of the
company.

7.1.1. PROPER CONVENING OF MEETING:

1. Proper authority:
A meeting must be convened by a proper authority. The proper authority to convene a general

meeting of shareholders is the Board of directors. Under certain circumstances meetings
can also be called by the members or the National Company Law Tribunal or the Central
Government. The secretary should call a meeting by issuing a notice with the authority of
board of directors.

2. Notice - (Company Act 2013-section 101):
The second requirement of a valid meeting is that a proper notice must be given to proper

person.

a) Meaning:
The notice of a meeting is an advance written intimation containing day. date, time and

place given by company to all those who are entitled to receive it.

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b) Contents of notice:
Every notice of company meeting must specify
i) Type of the meeting
ii) The exact day, date, time and place of meeting
iii) The agenda of meeting and contains a statement that member is entitled to appoint

proxy.
iv) If any special resolution is to be passed it must be mentioned as special resolution in

notice.
v) In case of special business to be transacted statutory note and an explanatory statement

must be given in the notice.

c) Authority to send notice:

The Board of directors is the authority to send the notice of the meeting. Normally the
board of directors authorizes the secretary to send the notice convening the meeting.

d) Authority to receive notice (section 172(2)):
i) All the share holders, in case of shareholders meeting.
ii) The Auditor of the company in case of Annual General meeting.
iii) The legal representatives of deceased or insolvent member
iv) A person named first in register of members in case of joint holders.
v) All directors in case of Board meeting / General meetings.

e) Period of Notice:

In case of general meeting, notice must be sent 21 clear days before the actual meeting i.e.
the day of sending notice and day of meeting is to be excluded while counting 21days. But
for a Board Meeting 7 days notice is required.

f ) Ways of serving notice (Section 172(2)):

i) Notice must be sent either personally or by ordinary post at the registered address of
the member in India only.

ii) If the member has no registered address in India, then it is sent to the address which
is given by the member.

iii) If any member wants the notice by registered post, the notice must be sent accordingly,
provided he pays charges in advance.

iv) Notice can also be advertised in a leading newspaper of the area, where the registered
office of the company is situated.

v) As per initiative of Ministry of Environment, company can also send notice of
meeting through e-mail.

g) A statement to be sent alongwith notice - (Section 102):

Where special business is to be transacted in the general meeting, an explanatory statement
to that effect is required to be annexed to the notice.

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h) Omission to give notice (Section 101 (4):
If notice is not sent to one or more members deliberately, the meeting would become

invalid.

3) Agenda :

• Meaning:

Agenda means a statement containing a list of items to be discussed at the meeting.
A secretary has to prepare the agenda in consultation with the chairman. Agenda is sent along

with the notice of the meeting.

• Importance of Agenda

i) Chairman can conduct the meeting efficiently with the help of agenda.
ii) Chairman can discuss the items as per the sequence of agenda.
iii) Members can get sufficient time to think over the items given in the agenda. So that they

come well prepared for the meeting and actively participate in it.
iv) All items included in agenda are discussed in the meeting.

• Guidelines for preparation of Agenda:

While preparing the agenda the secretary should keep in mind the following guiding principles.
i) Agenda must be prepared in simple language and it should be brief and clear.
ii) Routine or general nature of items should be put first in order then special matters and

contentious matter should be the last.
iii) Similar type of matters should be placed in a sequence on the agenda.
iv) All items included in the agenda must be within the scope of the meeting.

• Types of agenda:

There are two types of agenda - 1. Bare statement agenda in which all items are described
in brief and 2. Draft minutes agenda in which items are given in detail so that it is useful in
preparing the minutes of the meeting.

7.1.2 Proper constitution of meeting:
1) Quorum - (Section 103):
Quorum is the most essential condition for a valid meeting. Quorum means the minimum

number of members required to be present at a meeting. Presence of the members is essential
for transacting legally the business at the meeting. The quorum has to remain present from
beginning till the end of meeting. Secretary must ensure the quorum before the commencement
of meeting. A meeting in absence of quorum is invalid.

Provisions for Quorum ( Companies Act, 2013)
Quorum for General meeting
a) In case of public company:

Quorum depends upon the number of share holders.

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Number of shareholders Quorum

Not more than 1000 Five (5) members

More than 1000 but up to 5000 Fifteen (15)members

Exceeds 5000 Thirty (30) Members

b) In case of private company:
Two members personally present shall be the quorum for meeting of the company.

Quorum for Board Meeting:

According to the provision in the Companies Act, a quorum for Board Meeting is 1/3 of the
total number of directors or two directors whichever is higher.

2) Chairman of the meeting (Section 104)
There must be a proper person i.e. chairman to conduct a meeting properly. Chairman has to

preside over and conduct the proceedings of a meeting.

q Provisions for the appointment of Chairman: (Section 104)
If the articles of association of a company do not provide any provisions for the appointment

of a Chairman, then the appointment of Chairman shall be made as per the provisions of
Companies Act as follows:

i) Unless the articles of a company otherwise provides, the members personally present at
the meeting shall elect one of them to be the Chairman thereof on a show of hands.

ii) If a poll is demanded for the election of the Chairman, it shall be taken forthwith. The
Chairman elected by a show of hands shall exercise all the powers till the Chairman is
elected by poll.

iii) If some other person is elected as the Chairman as a result of the poll, that person shall be
the chairman for the rest of meeting.

q Powers of Chairman:
i) To keep order and conduct the meeting properly.
ii) To decide the priority of speakers.
iii) To maintain relevancy and order in debate.
iv) To prevent the use of improper language and behaviour of the member.
v) To adjourn the meeting if it becomes impossible to conduct and complete the meeting.
vi) To give casting vote when votes in favour of the proposal and against the proposal are

equal
vii) To declare the result of the voting.
viii) To give ruling on point of order.

q Duties of Chairman:
i) To see that the meeting is properly convened and constituted.
ii) To see the proceeding of the meeting are conducted in a proper manner.
iii) To see that the items are discussed according to agenda.
iv) To maintain order in the meeting.
v) To declare result of voting.

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vi) To see that proper and correct minutes are entered in the minutes book and to sign them.
vii) To act in the best interest of the meeting.
viii) To deal with all incidental questions which arise at a meeting.

7.1.3. PROPER CONDUCT OF MEETING:

1) Proxy (Section 105):

Meaning:
A proxy is a person who attends a general meeting and votes on behalf of a member of the

company.

Every member of a company has a statutory right to appoint a proxy.

q Legal provisions regarding proxy:

i) Appointment:

Any member of a company entitled to attend and vote at a meeting of the company shall
be entitled to appoint another person as a proxy to attend and vote at the meeting on his
behalf. It is also provided that the Central Government may prescribe certain companies
whose members shall not be entitled to appoint another person as a proxy. A minor cannot
be appointed as proxy. Proxy cannot be appointed for a Board meeting. The appointment
of proxy is valid for an adjourned meeting.

ii) Right:
A proxy shall not have the right to speak at the meeting and to vote except on a poll.

iii) Membership :
A person appointed as a proxy may or may not be a member of the company.

iv) A letter of authority/proxy form:

The duly completed proxy form must be submitted by the member in company’s registered
office at least 48 hours before the meeting and a separate proxy form is required for each
meeting.

v) Inspection:

A member can inspect any proxy form by giving not less than three days notice to the
company.

2) Motion: (Section 105)
A motion is a proposal put before a meeting for its consideration and adoption. A motion is

liable to alteration before it is adopted by the meeting.
A person who puts forth motion in the meeting is called a proposer or a mover.

q Essentials of a valid motion:
i) A motion must be in writing and signed by the proposer, and put to the meeting by the

Chairman.
ii) A motion should not contain any argument, inference or defamatory expression.
iii) Wording of motion should be affirmative - clear, and definite.
iv) Motion should be within the scope of agenda.
v) Motion should be seconded by at least one member.

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vi) Every member is allowed to speak on the motion only once.
vii) Motion can be withdrawn by proposer by following a procedure.

q Kind of motions

1) Formal motion 2) Substantive motion

1) Formal motion:
Formal motions are related to the procedures at the meeting and are moved for the purpose of

preventing or delaying or speeding up discussion on a motion. Following are types of formal
motion -

i) The Closure:
When a member is convinced that sufficient time has been spent on the discussion of a particular

motion, he may propose that the question be now put to vote. This is called as closure. The
object of moving a closure motion is not to solve the main question, but to avoid waste of time
and to arrive at a quick decision. If this motion is put to vote and if majority favours the same,
no further discussion is permitted.

ii) Previous Question motion:
The main purpose of this motion is to prevent discussion on the main motion. When some

members come to the conclusion that it is unwise or inconvenient discussion on the main
motion, they may move the previous question. The wording of this motion is ‘The question
be not now put.’ If it is carried, the discussion on the main motion is dropped. If the previous
question is lost, the original motion is put to vote.

iii) Next Business motion:
This motion is similar to the previous question motion. The object of moving such a motion is

to shelve discussion on the main motion before the meeting. The wordings of motion is ‘The
meeting to proceed to next business’.
Such motion is generally moved when a member is of the opinion that the main motion under
discussion is of little importance and other important items of business are not yet transacted.
In such a case the motion is put to vote and if it is carried, the original motion is dropped at
once and the meeting proceeds to next business.

iv) Adjournment of Debate motion:
By this motion discussion on the motion can be postponed. The wording of this motion is ‘The

debate on the subject be adjourned.’ The mover of the motion feels that additional information
is required for further discussion and the discussion should be delayed for particular period. If
it is carried, the debate will be postponed if it is lost the debate continues.

v) Adjournment of meeting motion:
The aim of this is to postpone the meeting for a particular period or indefinite period. The

wording of this motion is “The meeting be now adjourned.” If it is carried, the meeting is
postponed to future date. If it is lost, meeting continues.

2) Substantive motion:

A motion which is changed due to amendment is called substantive motion. When an

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amendment is passed, it is incorporated in the original motion. The substantive motion is put
to vote, if it is passed it becomes a resolution.

q Amendment:

An amendment is any alteration proposed by a member to the original motion when a motion
is under discussion.

Amendments are generally moved to alter original motion by-
a) Adding some new words.
b) Deleting some words.
c) Replacing some words.
d) By changing the position or place of words.
The amendment should be relevant to the main motion and it must not alter the original motion

entirely.

q Point of Order :

A point of order is a question or objection raised by any member when he wants to bring to the
notice of the chairperson the irregularities in the meeting.

The point of order may be for-

1) Absence of quorum

2) Breach of any rule relevant to meeting

3) Misbehaviour of any member.

4) Use of improper language by any member

When the point of order is raised, discussion on the original motion is stopped for some
time. The decision on the point of order is taken by the chairperson. It shall be final and
binding on the meeting.

3) Voting:
To vote means to express opinion in a formal way. After discussion on motion in a meeting, it

is put to vote for knowing the opinion of members. Voting is necessary to ensure the sense or
trend of the meeting. Each share holder has the right to vote on each motion in lawful manner.

q Methods of voting:

1. Voting by voice
Under this method the members are requested to say ‘yes’ if they are in favour of the motion

or say ‘No’ if they are against the motion. Decision is taken on the basis of volume of voice.

This method is exercised rarely. The volume of voice does not give the clear idea about the
majority of votes.

2. Voting by Division
Under this method present members are divided into two groups. Members in favour and those

against the matter are asked to go in different rooms. Then the trend of the meeting is ensured
by counting and chairman declares the result.

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3. Voting by show of hands - (section 107)
This method is used in the general meetings of a company. After the discussion on the motion

the chairman requests the members to raise their hands in favour or against the motion. The
chairman declares the result by counting number of hands in favour or against the proposal.
4. Voting by Ballot
Under this method to record the vote, ballot papers are distributed to every member and they
deposit it in the ballot box. The votes are counted and the result is declared. This method
maintains secrecy in voting.
5. Voting electronically (section 108)
The Central Government may prescribe certain companies for having compulsory electronic
voting in general meeting. Member may exercise his right to vote by the electronic means.
6. Voting by postal ballot (section-110)
The Central Government may prescribe certain companies for having voting by postal ballot.
Ballot papers are sent by post to members.
7. Voting by Poll
Poll can be demanded after the declaration of result by the show of hands. Under this method
each member can vote in proportion to the number of shares held by him. Polling papers are
given to members and proxies for recording their votes. The result of poll is final and not to be
challenged.
Legal provisions regarding voting by poll-
i) The chairman can demand poll
ii) In case of a private company.
a) Poll can be demanded by one member when not more than seven members are present
and
b) by two members when more than seven members are present
iii) In case of public company poll can be demand by at least five members present in person

or by proxy.
iv) It can also be demanded by any member/members present in person or by proxy holding

1/10 of the total voting power.
v) The poll must be conducted within 48 hours of its demand.
vi) The decision taken by poll is final and cannot be changed.
vii) The demand for poll can be withdrawn any time by the person who demanded it.

Merits :
1) Proxies are allowed to vote.
2) Secrecy can be maintained under this method.
3) It is scientific method of voting.
4) Shareholders can vote in the proportion of shares held.

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Demerits
i) Under this method ‘one share one vote’ principle is exercised hence this method is

criticized as capitalistic method of voting.
ii) This method is expensive, time consuming and complicated.

4) Resolution
A motion accepted in a meeting is called resolution. A Resolution is formal and final decision

of meeting. No discussion is allowed on the resolution. Every resolution should be recorded in
minutes book. Every resolution should be brief and framed in the affirmative form. Number of
members voting in favour and against the resolution should be mentioned. Resolution should
be drafted in present tense. Resolution cannot be altered.
Types of Resolution
A) Ordinary Resolution (Section 114)
A resolution which is passed by simple majority is called ordinary resolution. More than 50%
of the votes should be in favour of motion. An ordinary resolution need not be submitted to
registrar of companies. The notice of the meeting need not require to explain the particulars
of an ordinary resolution. For e.g. Approval of statutory report, Alteration of the share capital,
Declaration of Dividend, Approval of directors, auditor report and final accounts, Election of
directors, appointment of secretary and auditor and fix their consideration etc.
B) Special Resolution (Section 114(2))
The resolution which is passed by special majority is called as special resolution. It is passed
by 3/4 or 75% majority. The number of votes in favour of motion should be three times of the
votes cast against the motion. Purpose of passing a special resolution should be mentioned
in the notice of the meeting. A special resolution is passed in general meeting only. Notice
of Special Resolution has to be given to the members 21 days before the meeting. A copy of
special resolution must be filed with the Registrar of Companies through e - filing on MCA
portal within 30 days of passing resolution.
Examples of special Resolution-
i) Change in the name of the company (Section 13)
ii) Shifting of registered office of the company from one state to another (Section 12)
iii) Alteration in the object clause of company
iv) Reduction in the authorized share capital of the company
v) Alteration in the Articles of Association of company (Section 14)

C) Resolution requiring special notice (Section 115)
Some resolutions require special notice as per the Companies Act or Articles of Association of

the company, hence such resolutions are called resolution requiring special notice.
Special notice resolution may be ordinary or special resolution.
A proposer of the motion has to give a special notice of 14 days to the company. The company

should then give a notice of that resolution to all members at least 7 days before the meeting.

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Under the Companies Act 2013 for the following resolutions require special notice -
i) Resolution to appoint a person as a auditor other than a retiring auditors
ii) Resolution providing that a retiring auditor shall not be reappointed
iii) Resolution to appoint director other than retiring director
iv) Resolution to remove a director before the expiry of his term
v) Appointment of a person as a director in place of the director removed

D) Resolution requiring Registration (Section 117)
Resolutions which are required to be registered with the Registrar of Companies are called as

resolution requiring registration. Resolution should be filed with Registrar within 30 days of
it’s passing. Examples of such resolutions as following.
i) All Special Resolutions,
ii) Resolution made by Board of Directors regarding appointments or reappointment of

managing director,
iii) Resolution made by members regarding dissolution of company.

E) Resolution by Circulation
When directors have to take important and urgent decisions and do not have sufficient time to

call a meeting; at that time a draft resolution is prepared and forwarded to all directors to pass
resolution. It is called as resolution by circulation.
q Validity of Resolution
Resolutions passed at the meeting by following proper rules and regulations are termed as
valid resolutions. If resolutions are passed without following proper rules and regulations they
are termed as invalid resolutions.
Points regarding Invalid Resolutions
i) Resolution is not within the scope of notice and meeting.
ii) Resolution passed at the meeting but not properly convened and constituted.
iii) If the fact of special business is not mentioned in the notice of the meeting.
iv) If resolution requires a specific majority of votes but it is passed only by ordinary majority

of votes discussed at the meeting.
v) Resolution is out of the scope of Memorandum of Association.
vi) Voting on the motion is irregular.

5) Minutes (Section 118)
Meaning
The term minutes means written records of proceedings of a meeting.
Definition
According to M. C. Kuchhal - The term minutes means a concise and accurate official record

of the decisions taken at the meeting.
Minutes are prepared by the secretary within 15 days after the meeting. Minutes are recorded

in minutes book and written in the past tense. After preparing minutes, it should be passed in

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consecutive meeting. Minutes Books for General Meetings and Board Meetings are maintained
seperately.

Importance of Minutes :
1) Authentic Record
Detailed information about proceeding of the meeting is made available through minutes.

2) Evidence
Minutes can be used as prima facie legal evidence in the court of law.

3) Future reference
Minutes is a permanent record. It is useful for taking future managerial decisions.

4) Legal provisions
Minutes are to be prepared by following legal provisions mentioned in the Companies Act

and secretarial standard.

5) Information to Absent members
Minutes helps the absent members in knowing the proceedings of meeting and it also

serves as a reminder of the subject.

6) Information about Resolution
The motion and discussion on the motion are reflected in the resolution. Interested parties

can always refer to the text of a resolution when there is contradiction or confusion.

7) Inspection of Minutes (Section 119)
As per the Companies Act Minutes Book should be kept at the registered office of the

company and every member has right to inspect the minutes book of the general meetings.

Activity: Prepare an agenda for a meeting to discuss holding of Annual Day.

7.2 DISTINCTION BETWEEN -
1. Motion and Amendment

Sr. Points Motion Amendment
No.
1) Meaning Motion is a written proposal placed An amendment is an alteration

2) Purpose before the meeting for discussion or a modification proposed to the

3) Effect and decision. original motion.

The main purpose of motion is to The main purpose of an
discuss and to take proper decision. amendment is to revise or modify

the main motion.

When motion is accepted by When an amendment is approved

majority in the meeting, it becomes by majority, it becomes a part of

resolution. resolution.

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2. Motion and Resolution

Sr. Points Motion Resolution
No.

1) Meaning Motion is a written proposal Resolution is an accepted motion
placed before the meeting for in the meeting.
discussion and decision.

2) Amendment Motion is subject to amendment When resolution is passed, it

before it is put to vote. cannot be amended.

3) Recording A motion is not recorded in the All resolutions must be recorded

minutes book of a meeting. in the minute book of a meeting.

4) Filing Motion need not be filed with the Certain resolutions are required
registrar of companies. to be filed with the registrar of
the companies within 30 day of

the date of its passing.

5) Withdrawal It may be withdrawn by mover Once it is approved, it cannot be

before it is put to vote. withdrawn.

6) Types Motion can be Resolutions are of 3 types
i) formal motion
ii) substantive motion i) Ordinary ii) Special

iii) Resolution Requiring special
notice

3. Agenda and Minutes

Sr. Points Agenda Minutes
No.

1) Meaning Agenda is a list of business to be Minutes is the statutory record

transacted at the meeting. of business transacted at the

meeting.

2) Importance Agenda is sent to members along It acts as prima facie evidence
with the notice of meeting. It is in court of law and it is useful
useful to the chairman to take items for future reference.
for discussion according to agenda
Members can prepare themselves
for meeting.

3) When Agenda is prepared before the Minutes are prepared after the

prepared? meeting. meeting.

4) Tense Agenda is always written in the Minutes is always in the past

future tense. tense.

5) Where Agenda is included in the notice of Minutes is recorded in minutes

recorded? a meeting. book.

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4. Voting by show of hands and Voting by poll

Sr. Points Voting by show of hands Voting by poll
No.
1) Meaning A voting by show of hands is a Voting by poll is a method of
method of voting in which members voting in which every member
2) Secrecy cast their votes by raising hands. is given a ballot paper to record
his votes according to the
3) Voting by number of shares held by him.
proxy
Votes are given openly by show Votes are recorded on voting
4) Number of
votes of hands, hence secrecy is not papers hence secrecy is

5) Effect maintained. maintained.

Proxies are not allowed to vote Proxies can vote only in this

under this method. method.

‘One man, one vote’ is the principle ‘One share, one vote’ is the
of voting in this method. principle of voting by poll.
Therefore each member can
vote in proportion to the number
of shares held by him.

The decision by show of hands is The decision taken by poll is
cancelled, when poll is demanded. final and it cannot be cancelled.

It is binding on all the members

of the company.

5. Ordinary Resolution and Special Resolution

Sr. Points Ordinary Resolution Special Resolution
No.
1 Meaning The resolution which is passed by a The resolution which is passed

2 Majority simple majority of votes is called as by 3/4th majority of votes is

3 Examples ordinary Resolution. called as special resolution.

Ordinary resolution requires more Special resolution requires at

than 50% of majority of votes. least 75% majority of votes.

Appointment of auditors, Change in the name of company,

declaration of dividend, election of alteration in the object clause

directors, etc. of Memorandum, reduction in

share capital of company etc.

SUMMARY

1 A meeting may be defined as coming or gathering or assembly of two or more persons for
transacting any lawful business.

2 Company meeting is an assembly of people connected with the company who have gathered
for the purpose of discussing matters related to it.

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3 Notice is an advance intimation given by company to its members containing agenda, day,
date, time and place of meeting.

4 Agenda is a statement containing a list of items to be discussed at the meeting.
5 Quorum means the minimum number of members required to be present at the meeting.
6 Chairman of meeting is a person who conducts the meeting properly.
7 Proxy is the representative of an absent member.
8 Motion is a proposal put before the meeting for discussion and decision.
9 Accepted motion is called resolution. An amendment is the alteration proposed to the original

motion.
10 A point of order is a question raised regarding the conduct of meeting or the procedure of

meeting.
11 Minutes is the written record of proceeding of meeting.

EXERCISE

Q.1 A. Select the correct answer from the options given below and rewrite the statements.
1) The intimation to members stating the day, date, time and place of meeting is known

as................... .
a) quorum b) agenda c) notice
2) The notice of the general meeting must be sent to all members ............. clear days before

the meeting.
a) 24 b) 21 c) 14
3) The person who presides over the meeting is known as................. .
a) Secretary b) Chairman c) Director
4) A proxy can vote only in the case of voting by................ .
a) division b) show of hand c) poll
5) The appointment of an auditor requires ........................ .
a) resolution requiring special notice b) an ordinary resolution
c) a special resolution.
6) A ..................is the proposal put before the meeting for discussion and decision.
a) Motion b) Resolution c) Minutes
7) The right of casting vote is given to the....................... .
a) Director b) Chairman c) Secretary
8) Minutes must be recorded within .................days of the conclusion of the meeting.
a) 60 b) 21 c) 15
9) ..................resolutions are not passed in general meeting.
a) Ordinary b) Special resolution c) Resolution by circulation

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10) For passing special resolution.................. majority is required.
a) 51% b) 66% c) 75%

11) For alterations in the Articles of Associations..................... is required.
a) a special resolution b) an ordinary resolution
c) a resolution requiring a special notice

12) Provisions about resolutions are contained in ............ of a company.
a) Articles of Association b) Memorandum of Association c) Prospectus

13) When a poll is demanded it must be taken within ................. hours.

a) 48 b) 36 c) 12



B. Match the pairs:



Group ‘A’ Group ‘B’

a) Chairman 1) Proposal put before the meeting

b) Quorum 2) Casting vote

c) Motion 3) Amendment

d) Minutes 4) Minimum number of members required for a valid meeting

e) Notice 5) Voting

f) Proxy 6) Maximum number of members required for a valid meeting

7) Record of meeting
8) Accepted motion

9) Intimation stating agenda, day, date, time and place of meeting

10) Representative of member

11) Representative of a director

12) Formal motion

C. Write a word or a term or a phrase which can substitute each of the following statements.
1) The person who signs the minutes of the meeting.
2) A method of voting where members can vote in proportion to the number of shares held.
3) A resolution passed by simple majority.
4) A resolution passed by 3/4 majority.
5) A company officer who is required to draft the minutes of the meeting.
6) A person who conducts the proceedings of the meeting.

D. State whether the following statements are True or False.
1) Minutes are prepared before the meeting.
2) Maximum number of members required to attend the meeting is called as Quorum.
3) Meetings are held only to review the progress of the company.
4) Chairman has right to conduct the meeting.

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E) Find the odd one.
1) Next Business Motion, Previous Question Motion, special Resolution.
2) Ordinary Resolution, Resolution requiring special notice, Substantive motion.

F) Complete the sentences.
1) The authority who can convene the general meeting of shareholders is ............. .
2) The advance intimation about the day, date, time etc. of a meeting sent to the members is

called as ............. .
3) The minimum number of members required to be present at a meeting is called as ..............
4) A person who attends a general meeting and votes on behalf of a member is called as

............. .
5) A proposal put before a meeting for consideration and adoption is called as ............. .
6) A formal and final decision taken in a meeting is called as ............. .
7) The written records of proceedings of a meeting is called as ............. .

G) Select the correct option form the bracket.

Group ‘A’ Group ‘B’
1) Voting by poll ----------------------------
2) ---------------------------- Special resolution
3) Substantive Motion ----------------------------
4) ---------------------------- Chairman

(Presides over the meeting, Proxy, An amended Motion, 3/4 or 75% majority)

H) Answer in one sentence.
1) What is Minutes?
2) What is Notice?
3) What is Ordinary Resolution?
4) What is agenda?
5) Who is Chairman?
6) What is point of order?

I) Correct the underlined word and rewrite the following sentences.
1) Minutes are prepared before the meeting.
2) Resolution is a proposal put before a meeting for discussion.
3) Polling papers are used for voting by show of hands.
4) A Motion is a final decision taken in the meeting.
5) Agenda is prepared after the meeting.

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J) Arrange in proper order.
1) a) Drafting Minutes
b) Sending notice
c) Confirming quorum
2) a) Motion
b) Resolution
c) Voting

Q.2 Explain the following terms/concepts.

1) Ordinary Resolution 2) Agenda 3) Quorum
6) Motion
4) Proxy 5) Amendment 9) Minutes

7) Special Resolution 8) Notice

10) Point of order

Q.3 Study the following case/situation and express your opinion.
1) XYZ Ltd co. sent notice of its Annual General meeting to its members. In the meeting a

resolution is to be passed on altering the Articles of Association.
a) Should agenda also be sent with Notice?
b) What type of resolution is needed to alter the Articles?
c) Should the resolution for altering articles be filed with registrar of companies?

2) A General meeting of public limited company is to be held. State the provision of quorum
for -

a) meeting of the company which has less than 1000 members
b) meeting of the company which has more than 5000 members
c) meeting of the company which has 2500 members

3) Mr. P is elected as chairman of General Meeting. Please advise him on the following
matters:

a) What should be done if the votes cast in favour and against the motion are equal?
b) How many votes can a member cast under poll method?
c) What should Mr. P do if any point of order is raised by a member?

Q.4 Distinguish between the following
1) Agenda and Minutes
2) Motion and Resolution
3) Voting by show of hands and Voting by poll.

Q.5. Answer in brief.
1) State the importance of company meetings.
2) State the legal provisions regarding Proxy.
3) When can point of order be raised?
4) Explain any four methods of Voting?
5) State the importance of Minutes.

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Q.6 Justify the following statements.
1) Meeting must be duly convened and properly constituted.
2) Chairman is responsible for proper conduct of meeting.
3) Motion can be amended.
4) Proxy can not speak in the meeting.
5) Notice is issued to members for a meeting along with agenda.
Q.7 Answer the following questions.
1) Explain the powers and duties of chairman
2) Explain the different methods of voting.
3) Explain the types of resolution

vvv

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8 COMPANY MEETINGS - II

8.1 Types of Meeting
8.1.1 Shareholders Meetings
A) General meetings
1. Annual General Meeting
2. Extra ordinary Meeting
B) Class Meeting
8.1.2 Directors Meetings
1. Board Meeting
2. Committee Meeting
8.1.3 Creditors Meeting


8.2 Functions of Secretary related with Annual General Meeting
8.3 Distinction
1. Shareholders Meeting and Board Meeting
2. Annual General Meeting and Extra ordinary General Meeting

INTRODUCTION

In Joint stock company there is separation of ownership and management. Hence, there is a
need to conduct meetings of the shareholders and Board of Directors. Several types of Shareholders
meetings and Directors meetings are conducted by the company.

8.1 TYPES OF MEETING :

Company Meetings

Creditors Meetings
Share holders meetings Directors Meetings




General Class Board Committee
Meetings Meetings Meetings Meetings


1) Annual General Meeting
2) Extraordinary General Meeting

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8.1.1 SHAREHOLDERS MEETING :
Shareholders participate in the management of the company. They exercise their right to

manage the company by participating in shareholders meetings. Shareholders meetings are arranged
to discuss on various issues and arrive at decisions.

A) General Meetings : These are meetings of equity shareholders of the company. There are two
types of General Meeting - Annual General Meeting and Extra Ordinary General Meeting.

1) Annual General Meeting (Section 96)
Annual General Meeting is a meeting of equity shareholders which is held once in every

financial year.
l Purpose of Annual General Meeting

Annual General Meeting of shareholders is held every year to review the progress made
by the company during the financial year and to discuss and to take decisions on various
issues such as -

1) To adopt Annual Accounts, Directors’ Report and Auditor’s Report
2) To declare dividend
3) To elect Directors in place of retiring Directors
4) To appoint auditors and fix their remuneration
5) To review the progress and performance of the company

l Legal provisions

1) Time of Holding Annual General Meeting
A) First Annual General Meeting : The first Annual General Meeting shall be held

within nine months of closing of the first financial year of the company.
B) Subsequent Annual General Meeting : It must be held within 6 months after

completion of its financial year.
C) The Interval between two AGM - should not be more than 15 months.

D) Extension of time for conducting AGM - The registrar may for any reason extend
time to conduct AGM by a period not more than three months. However, the Registrar
cannot provide extension in case of the first AGM.

One Person Company is exempted from provision of AGM.

2) Authority to convene Meeting : The Board of Directors is the proper authority to convene
Annual General Meeting.

3) Notice : The secretary should send 21 clear days notice to all members of the company at
their registered address by post or through electronic mode.

4) Date, time and place of AGM : Every Annual Meeting shall be called during business
hours between 9.00am to 6 pm on any day that is not a national holiday and shall be held
either at the registered office of the company or at some other place within the city or
village in which the registered office of the company is situated.

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National holiday means and includes a day declared as National holiday by Central
Government.

5) Quorum : According to Companies Act, 2013 the quorum for AGM of a public company
is as under

Number of shareholders Quorum

Not more than 1000 Five (5) members

More than 1000 but up to 5000 Fifteen (15) members

Exceeds 5000 Thirty (30) members


For private company, minimum two members should be personally present.

6) Adjournment of Meeting : Annual General Meeting is adjourned in absence of Quorum.
It is held on the same day, time and place in the next week.

7) Default : If the Annual General Meeting is not held as per the provisions of the Act
or instruction of Central Government, it is called as default in holding Annual General
Meeting. The company and every officer of the company who is in default are punishable
with fine. Fine may be upto ` 1,00,000 and in the case of continuing default with further
fine which may extend upto ` 5000 per day.


Activity : Visit the website of any public company and study it’s Annual Report/

Director’s Report.

8.1.2 EXTRA ORDINARY GENERAL MEETING (SECTION 100)

Meaning :

The meeting which is held to discuss and decide special or urgent matters is called as Extra
Ordinary General Meeting. Such special matters which are transacted in EOGM are called ‘special
business’.

This meeting is convened between two Annual General Meetings.

Purpose of Extra Ordinary General Meeting : Extra Ordinary General Meeting of
shareholders is held to take immediate decisions on some important issues of the company.

1. Alteration in Memorandum of Association
2. Alteration of Articles of Association
3. Removal of Director before expiry of his / her terms
4. Removal of Auditor before expiry of his / her terms
5. Voluntary winding up of company

• Legal Provisions

1. Authority to convene

A) Board of Directors :
The Board of Directors has the right to call an Extra Ordinary General Meeting by giving

proper notice to shareholders.

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B) Board of Directors on requisition of Members :

Every member can request the company to hold Extra Ordinary General Meeting. In
case of company having share capital, members holding at least 1/10 of the paid up share
capital carrying voting rights and in case of a company not having share capital, members
having 10% of voting powers can request to hold Extra Ordinary General Meeting. The
Board must held EOGM within 45 days of the date of the receipt of the requisition from
the members.

C) Requisitionist themselves :

If the Board fails to call on Extra Ordinary General Meeting, the meeting can be called by
the requisitionist themselves. It should be held within 3 months from the date of deposit of
requisition. Company shall pay for all the expenses incurred in holding this extra ordinary
General Meeting.

D) National Company Law Tribunal (NCLT) or Government :
If due to any reason it is impracticable for a company to hold Extra Ordinary General

Meeting then NCLT can order the company to hold it. NCLT can order such a meeting on
its own or at the request of a director or any member having voting rights.

2. The provisions related with period of notice and quorum are same as annual general
meeting.

B) Class Meeting : (Section - 48)

i) Meaning : A meeting which is held to make changes in rights and duties of particular
class of shareholders and to get their consent for the changes affecting their interest is
called as Class Meeting.

ii) Resolution : In this meeting generally special resolutions are passed.

iii) Purpose : When company wants to change rights of a particular class of shareholders,
then company has to call a meeting of such shareholders to get consent for a the change.

iv) Frequency : The class meeting is not held regularly.

8.1 DIRECTORS MEETING (SECTION 173)
The Directors are the elected representatives of the shareholders. They are responsible for day
to day affairs of the company. Directors Meetings are arranged to discuss on policy matters and to
take decision relating to the management of the company. Directors Meetings are classified in two
categories - Board Meeting and Committee Meeting.

1) Board Meeting (Section 173)
It is the meeting of Board of Directors. In pursuit of regular management of the business,

the Board of Directors have to meet frequently. The Board of Directors can exercise their powers
collectively through the Board Meeting.

l Legal provisions regarding Board Meeting :

A) Authority to Convene :
The Chairman of the Board is the proper authority to call the Board Meeting.

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B) Number of Board Meeting :

i) First Board Meeting : Every company shall hold the first Meeting of the Board of
directors within 30 days of the date of it’s incorporation.

ii) Subsequent Board Meeting : Every company shall hold minimum of 4 Board
meetings every year. The gap between two meetings should not be more than 120
days.

iii) In case of One Person Company : A One-Person Company, small company and
dormant company, the meeting of Board of Directors should be conducted at least
one meeting in each half of calendar year and the gap between the two meetings
should not be less than 90 days.

C) Virtual Meeting :

The participation of Directors in a meeting of the Board may be either in person or through
video conferencing or other audio visual means. The meeting should be capable of
recording and recognizing the participation of the directors. In certain cases, the Central
Government shall specify certain matters that cannot be dealt through video conferencing
or other audio visual means.

D) Notice (Section 173 (3) :

The notice of every Board Meeting must be given to every director at least 7 days before

the meeting at his address. The notice is sent along with agenda of meeting. The notice
shall be sent by hand delivery or by post or electronic means. Every officer whose duty is
to give notice fails to do so shall be liable to a penalty of Rs.25000/-.

E) Quorum – (Section 174) :

As per the Companies Act the quorum for the Board Meeting is 1/3 of total number of
directors or two directors whichever is higher. Any fraction should be rounded of as
one. Interested directors i.e. directors who have a personal interest in any matter to be
discussed in the meeting are excluded from the quorum.

F) Adjournment of meeting :

The Board Meeting is adjourned in the absence of quorum. It is to be held on the same
day, time and place in the next week.

2) Committee Meeting :

As per the Articles of Association of a company, Board of Directors appoint small committees
of Directors to study the various matters / problems of the company and to get reports from
them. Audit committee, Transfer of share committee, share allotment committee, Enquiry
committee etc. are the examples of committees. Meeting of such committees are called
committee meetings. Secretary assists the committee and maintains separate minute book for
recording the proceedings of committee meetings.


8.1.3 CREDITORS MEETINGS :

Company can hold meeting of creditors like debenture holders, depositors, company bankers,
lenders etc. to discuss on certain issues relating to the terms and conditions of loans which affect
their interest for e.g. to alter the rate of interest, to alter the terms of security to modify the rights of
creditors etc. When a company is in a financial difficulty, it may call meeting of creditors to secure
their support.

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8.2 FUNCTIONS OF SECRETARY RELATED WITH ANNUAL
GENERAL MEETING
Secretary has to perform several functions related with general as well as board meetings. The
functions are important for compliance of provisions of the Act and for smooth conduct of meeting.
Secretary has to perform functions before, during and after the meeting. Secretary’s duties may vary
to some extent according to type of meeting. Following are the functions of secretary related with
Annual General Meeting -

l Functions before the Annual General Meeting :

1) Fixing the Board Meeting :

Secretary arranges the Board Meeting which is held to fix the date, time and place of the
Annual General Meeting.

2) Issue of Notice :

Secretary has to print and send notice and agenda to members and statutory auditors
21 clear days before the meeting and has to publish it in leading newspapers for the
convenience of all.

3) Speech of the Chairman :
Secretary assists in preparing the speech of Chairman.

4) Preliminary arrangement :
Secretary books the hall and makes needful arrangement for the meeting.

5) Company Accounts :

Secretary has to see that accounts are finalized and get the statement of profit and loss
and balance sheet audited and auditor’s report related to these accounts is ready. Secretary

has to prepare Annual Report.

l Functions during the Annual General Meeting :

1) Attendance :
Secretary arranges to takes down the attendance of members and takes their signatures.

2) Quorum :
Secretary ensures the quorum is present and reports to the Chairman.

3) Reading Reports :
Secretary reads the notice and the Director’s Report and any other reports at the beginning

of the meeting.

4) Writing the proceedings :
Secretary notes down the proceedings of the meeting which are useful to draft the minutes

of the meeting.

5) Helps Chairman :
Secretary provides information, material etc, to the Chairman as and when needed for

smooth conduct of the meeting.
6) Conduct Poll :
Secretary makes arrangement for conducting the poll, if it is demanded by the members.

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l Functions after the Annual General Meeting :

1) Drafting the Minutes :
Secretary drafts the minutes of the meeting and gives the same to the Chairman for

approval.

2) Implementing decisions :
Secretary instructs the concerned officers for implementing the decisions taken at the

meeting.

3) Sending documents and filing resolutions :
Secretary has to send dividend warrants to the members and file Annual Report with the

Registrar. In case of special resolution passed, secretary has to file the special resolution
with Registrar within 30 days of passing.

4) Send information to absent members :
Secretary sends the information of the proceedings of the meeting to the absent members.

Activity :
Enlist the functions of Secretary related to Extra Ordinary General Meeting.

8.3 DISTINCTION :
1. Shareholders Meeting and Board Meeting

Sr. Points Shareholders’ Meeting Board Meeting
No.
1) Meaning A meeting of all the shareholders or A meeting of all the Directors of

2) How many members of the company is called a the company is called a Board
times
shareholders meeting. meeting.
3) Quorum
Annual General Meeting is held once Minimum 4 board meetings in
in every year. Extra ordinary general a year and gap between two
meeting is held to discuss and decide consecutive meetings should not
special or urgent matters as and when be more than 120 days.
required.

The quorum for a shareholders meeting The quorum for a Board meeting
is as follows is minimum 2 directors or 1/3
A) In case of public company of the total number of directors
whichever is higher.
Number of shareholder Quorum
Not more than 1000 5 members
More than 1000 but 15 members
up to 5000
Exceeds 5000 30 members

B) In case of private company two
members personally present shall be the
quorum for meeting of the company.

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Sr. Points Shareholders’ Meeting Board Meeting
No.
4) Proxy A shareholder can appoint a proxy to A Director cannot appoint proxy

5) Notice attend and vote at meeting on his / her to attend and vote in a meeting on

6) Purpose behalf. his / her behalf.

A notice of this meeting must be sent to The notice of Board meeting must

all the members at least 21 clear days be sent to every Director at least 7

before the meeting. days before the meeting.

The purpose of this meeting is to take The purpose of this meeting is to
approval of shareholders on certain discuss the policy matters of the
matters like appointment of Director company like issue of shares, calls
and Auditor, approval of Annual Report on shares, forfeiture of shares,
etc. appointment of staff, expansion
of business etc.

2. Annual general meeting and Extra ordinary general meeting

Sr. Points Annual General Meeting Extra ordinary General Meeting
No.
1) Meaning A meeting of all shareholders A meeting of all shareholders held to
held once in every year as per discuss and decide urgent matters as
2) Purpose the provision of section 96 of the per the provision of Section 100 of the
companies Act 2013 is called as Companies Act 2013 is called as extra
3) Time of Annual General Meeting ordinary general meeting
holding
The purpose of this meeting is to The purpose of this meeting is to discuss
4) Authority review the progress made by the and decide urgent and special matters.
to call the company during the year.
meeting
The first Annual General Meeting Extra Ordinary General Meeting is held
is held within 9 month after the at any time between two Annual General
completion of first financial year Meetings.
of the company and subsequent
Annual General Meeting is
held within 6 months after the
completion of financial year.

Annual General Meeting is usually Extra ordinary general meeting is called
called by the Board of Directors by
or under certain circumstances by
the Central Government. A) Board of Directors

B) Board of directors on requisition of
members

C) The National Company Law
Tribunal.

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Sr. Points Annual General Meeting Extra ordinary General Meeting
No.

5) Business This Meeting is held This Meeting is held to discuss matters

transacted A) To approve annual accounts like

B) To approve Auditor’s and A) To alter Memorandum of

Directors’ Report Association.

C) To appoint directors, B) To alter Articles of Association

auditors C) Removal of a director before expiry

D) To declare dividend of his / her term

D) Voluntary winding up of a company

6) Penalty In case of default in holding this If the directors fail to hold this meeting on
requisition, the requisitionists themselves
meeting, every officer concerned can hold it and recover the expense of
is punishable with a fine ` holding such meeting from the company.
1,00,000 and a further a fine of
` 5000 per day till the default

continues.

SUMMARY

Various meetings are arranged in the company. The purpose of every meeting is to discuss the
different issues/matters related to the company and to take proper decisions.

Types of Meeting are as under-

A) Shareholders Meetings :
1) Annual General Meeting : It is held every year at the completion of financial year. 21

days notice is required to be sent to members. Annual report is sent with notice. It is held
to give information to the members about the working of the company during the year.
Secretary has to perform certain functions before, during and after the Annual General
Meeting.
2) Extra ordinary General Meeting : It is called for special and urgent matters. It is held
between two Annual General Meetings.
3) Class Meeting : It is the meeting of particular class of shareholders.

B) Board Meeting :
1) Directors Meeting : It is arranged to discuss policy matters and take decisions relating to

the management of the company.
2) Committee Meeting : Board of Directors appoints certain committees to study the

various matters of the company. Committee works within a specific period of time and
submit their report to the Board. Such meetings are called Committee Meeting.

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C) Creditors Meeting :

It is meeting of creditors like debenture holders, depositors, bankers etc. The purpose of this
meeting may be to alter rate of interest, terms of security and modify the rights of creditors.

EXERCISE

Q.1 A. Select the correct answer from the options given below and rewrite the statements.

1) The secretary has to prepare ................... before the meeting.
a) resolution b) notice c) minutes

2) General Meeting must have a notice of at least ............... clear days.
a) 7 b) 21 c) 14

3) The gap between two annual general meetings should not be more than .............. months.
a) 15 b) 18 c) 24

4) Auditor is appointed in .................... .

a) Annual General Meeting b) Creditors Meeting c) Extra ordinary General
Meeting

5) The business transacted in extra ordinary general meeting is ................... business.

a) Ordinary b) Routine c) Special

6) An extra ordinary general meeting is held ....................... .
a) once in a year b) once in the life time c) under special circumstances

7) Writing the minutes of meeting is the duty of the ...................... .

a) Chairman b) Director c) Secretary

8) New Directors in place of retiring Directors are appointed in the .............. .
a) Class Meeting b) Annual General Meeting c) Creditors Meeting

9) Before the Annual General Meeting is held the Secretary has to compile ..................... .
a) Auditor’s Report b) Committee Report c) Annual Report

10) The Secretary has to draft the minutes of the meeting within ................ days of the meeting.
a) Fifteen b) Sixty c) Forty

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B. Match the pairs.

Group ‘A’ Group ‘B’
a) Board Meeting 1) Once in the year
b) Auditor 2) Minimum 4 meetings in a year
c) Annual General Meeting 3) Prepare at any time
d) Extra ordinary General meeting 4) Auditor’s Report
e) Minutes of meeting 5) Prepared before the meeting
6) Prepared after the meeting
7) Under special circumstance
8) Prepared during the meeting
9) Once in Six months
10) Meeting of creditors

C. Write a word or a term or a phrase which can substitute each of the following statements.
1) A meeting of shareholders which is held once in a year.
2) A meeting of shareholders which is held between two annual general meetings.
3) A Report which is prepared before Annual General Meeting.
4) A meeting of the shareholders which is held under special circumstances.
5) A meeting of the preference shareholders of a company.

D. State whether the following statements are True or False.
1) Only special business is transacted at Annual General Meeting.
2) Annual Report is prepared by members.
3) Extra ordinary General Meeting is called for special and urgent purpose.
4) A member has a right to attend Board meeting.
5) Class meeting is the meeting of particular class of shareholders.
6) Director cannot appoint proxy to attend and vote at board meeting.
7) 21 clear days notice should be given in case of Board Meeting.
8) Secretary has to arrange to take down the notes of the proceedings of the meeting.

E) Find the odd one.
1) Annual General Meeting, Extra Ordinary General Meeting, Board Meeting
2) Annual General Meeting, Committee Meeting, Class Meeting

F) Complete the sentences.
1) The meeting which is held once in every financial year is called is ............. .
2) The meeting held to discuss and decide any special or urgent matters is called as ..............
3) Meeting of all Directors is called as ............. .
4) The Authority to convene the Annual General Meeting is with the ............. .

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G) Select the correct option form the bracket.

Group ‘A’ Group ‘B’

1) Interval between two Annual ----------------------------
General Meetings

2) First Board Meeting ----------------------------

3) ------------------- 21 clear days

4) ------------------- Alteration in Memorandum of
Assocition

(Notice of General Meeting, Extra ordinary General Meeting, Not more than 15 months, within
30 days of company’s Incorporation))

H) Answer in one sentence.
1) Who can attend Board Meetings?
2) When can an Adjourned Annual General meeting be held?
3) Why is Extra - ordinary General Meeting held?
4) When should the first Annual General Meeting be held?
5) What should be the interval between two Annual General Meeting?
6) What should be the gap between two Board Meetings?
I) Correct the underline word and rewrite the following sentences.
1) Minimum four Committee Meeting s must be held in a year.
2) Creditors Meeting must be held once in every year.
3) Extra Ordinary Meetings must be held every year.
4) The Meeting of all Directors is called Annual General Meeting.
Q.2 Explain the following terms/concepts.
1) Committee Meeting
2) Virtual Meeting
3) Creditors Meeting

Q.3 Study the following case/situation and express your opinion.

1) Platinum Limited Company was incorporated on 1st Jan.2018. Advice the Board of
Directors on the following matters.

a) Within what period should the company hold its 1st Annual General Meeting?
b) At which place should the Annual General Meeting be held.
c) How many days in advance should the notice and agenda be sent to members?

2) XYZ Ltd held its Annual General Meeting on 11th May 2018. On 1st June Mr. X, a Director
of the company was arrested for a financial scam. Hence the shareholders of the company
want to remove him.

a) Can the company call for the next Annual General Meeting to be held immediately
to remove the Director?

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b) Which meeting of members should the company hold to discuss removal of the
Director?

c) What type of resolution will be passed in this meeting for removal of the Director?

Q.4 Distinguish between the following.
1) Shareholders’ Meeting and Board Meeting
2) Annual General Meeting and Extra ordinary General Meeting.

Q. 5 Answer in brief.
1) List the duties of a Secretary after the Annual General Meeting.
2) State the objectives of Annual General Meeting.
3) State any four legal provisions regarding Board Meeting.
4) What are Class Meetings?
5) What is the purpose of conducting Extra ordinary General meeting?

Q.6 Justify the following statements.
1) Annual General Meeting is adjourned in absence of quorum.
2) A notice of meeting must be sent to all members in case of General Meeting.
3) Extra ordinary general meeting is called under special circumstances.
4) Board of Directors can exercise their powers collectively through the Board Meeting.
5) The Quorum for Annual General Meeting of a public company depends upon the number

of shareholders.
6) When a company is in a financial difficulty, it may call a meeting of creditors.
7) As per the Companies Act every company has to hold the Annual General Meeting.

Q.7 Answer the following questions.
1) Explain the functions of a secretary related with Annual General Meeting.
2) Explain the different types of General Meetings of company.
3) Explain the different types of Directors Meeting.

vvv

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9 BUSINESS COMMUNICATION SKILLS
OF SECRETARY

9.1 Business communication : Meaning and Definition
9.2 Types of communication
9.3 Methods of communication
9.4 Merits of written communication
9.5 Modes of electronic communication
9.6 Essential skills for effective communication
9.7 Roles of Secretary in Business communication
9.7. 1 Business Letter
9.7. 2 Notices
9.7. 3 Reports
9.7. 4 Minutes

INTRODUCTION:
The term ‘communication’ is derived from the Latin term ‘communis’ that means ‘common’.

Whatever is common is shared by all.
George R. Terry defines “Communication is an exchange of facts, ideas, opinions or emotions

by two or more persons”.

9.1 MEANING AND DEFINITION OF BUSINESS COMMUNICATION
q MEANING:

Business communication is the branch of general communication which is especially concerned
with business activities. When communication takes place among business entities concerning
business affairs or business related issues it is known as business communication.

q DEFINITION:
Brennar defines “Business communication is the expression channeling, receiving and

interchanging of ideas in commerce and industry”.

9.2 TYPES OF COMMUNICATION:
No organization can function satisfactorily or achieve its goals without effective
communication that happens both internally and externally.

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A INTERNAL COMMUNICATION:
Internal communication refers to the communication that takes place internally between

various departments of an organization.

Internal communication is important because it supports the managerial functions.

B. EXTERNAL COMMUNICATION:

External communication refers to the communication that takes place between business
organizations and outsiders like banks, suppliers, creditors, Government, etc.
External communication connects an enterprise to the outside environment.


9.3 METHODS OF COMMUNICATION:

Methods of communication refer to the path, through which the message passes from one
person to the other. Communication can be either verbal (oral), non-verbal and written.

A VERBAL (ORAL) COMMUNICATION:

In the process of communication, conveying a message in spoken form is known as verbal
or oral communication. Oral communication takes place in different ways such as personal talks,
interviews, speeches and talking on telephone etc.

B NON-VERBAL COMMUNICATION:

Man does not communicate through words alone or only through writing, speaking and
listening. There is another aspect of communication, that is, the non-verbal aspect. Non-verbal
communication is defined as communication that involves neither written nor spoken words. Non-
verbal communication takes place in different ways such as body language, facial expression, eye
contact, silence, symbols, signs, gestures etc.

C WRITTEN COMMUNICATION:

When exchange of information or ideas is in a written form rather than by spoken words, it
is known as written communication. Written communication includes reports, letters, circulars etc.
The choice of words should be made carefully in written communication and the words should be
such as to convey a specific meaning and not confuse the reader with multiple meanings. As far as
possible messages should be in short sentences so that the receiver has no difficulty in finding the
true meaning of the message.

There are many situations when written communication is used. Many types of documents
are prepared for official work. The layout for each document is decided by custom. Letters, memos,
notices, circulars, reports, minutes are some of the common types of communication.

9.4 MERITS OF WRITTEN COMMUNICATION:

i) Accurate and precise:

Written communication is usually drafted with great care. Since written communication

is open to verification and its authenticity can be easily challenged, the communicator has
to be accurate and factual. Therefore, in written communication, there is an insistence on
greater accuracy and precision.

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ii) Re-read many times:

The receiver of a written communication can go over the message at any time again in the
future. He can re-read till he thinks he has properly understood it.

iii) Permanent record:

Written communication becomes a permanent record of the organization and can prove
very useful for future reference.

iv) Documentary evidence:
Written communication is acceptable as a legal document and as legal evidence also.

v) Wide access:

Written communication is the best channel of communication for conveying information
to persons living at different places.

vi) No need for personal contact:

It is not necessary for both parties to be available at the time of communication. It is
because under this form of communication, messages can be sent to the concerned person
which can be read when the receiver gets spare time.

vii) Completeness:

Written messages are prepared with perfect knowledge of the things concerning the
matter. So there is completeness in the message.

viii) Economical:

If the receiver of the message is at a far away place, then this method is economical as
postal and courier charges are quite nominal. Now a days e-mail are more popular method
of written communication.

9.5 MODES OF ELECTRONIC COMMUNICATION:

Video E-mail
Conferencing
Website

Modes
of electronic
Communication

Mobile Blog
Cellular
Phone

Social
Media
Network

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i) E-Mail:
E-mail is an electronic mail means sending messages using electronic devices through internet.

It is possible to send electronic files through e-mail in the form of words, tables, pictures,
graphs, sounds, videos and so on.

ii) Websites:
Website is a set of interconnected web pages located on a single web domain. These pages

contain the information provided by owner of the website, which can be a person, a group
or an organization. It is accessible through the internet or a private local area network. Each
website has a unique internet address known as a ‘Uniform Resource Locater (URL)’. Each
website address starts with ‘www’. (world wide web).

iii) Blog:

A business blog (b-blog) is a website for publishing, informal online articles that are either
included in a company’s internal communication system or posted on the internet for the
public to read.

A business blog may also be referred to as a corporate blog or corporate web blog.

iv) Social media network:
Social media are online interactive groups created using advanced mobile and web-based

technologies.

There are various social networking platforms that allow their users to exchange ideas or
information.

From the business point of view it provides great opportunity to interact with the public and
communicate about their products and services. It helps in developing loyalties and strong
relationship with the audience and the consumers. There are different types of social media
like Twitter, Facebook, YouTube etc. which are very popular these days.

v) Mobile / cellular phone:
Since past few years the usage of mobile phones has increased. Companies find it as yet

another medium to advertise their product by call or by using a short message service (SMS)
to reach the customers.

vi) Video conferencing:
Video conferencing means using computers to provide a video link between two or more people.

This can be simple two-way personalized web-cam based communication. The participants are
able to see and hear each other and also display visual data, models etc.


9.6 ESSENTIAL SKILLS FOR EFFECTIVE COMMUNICATION:
Being able to communicate effectively is an essential skill. Whether it is in one’s business life

or personal relationship, effective communication is the key to our success.

i) Listening:
One of the most important aspect of effective communication is being a good listener. Effective

communication requires active listening. Active listening involves hearing and understanding
what a person is saying to you. Unless you understand clearly what a person is telling you,
you cannot respond appropriately.

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ii) Body language:
Body language is an important communication tool. Body language should help convey words.

Other factors to be considered are things like the tone and pitch of voice, hand gestures and
ensuring eye contact.

iii) Clear and concise:
Message should be conveyed by using as few words as possible, whether in person or via

telephone or email. Message should be clear, concise and direct. Avoid using excessive words.
Before speaking, give some thought to the message to be conveyed. This will prevent causing
any confusion.

iv) Personable:
When communicating face to face with someone, use friendly tone and ask personal questions.

This helps in creating a personal touch.

v) Confident:
For effective communication confidence is needed. Making eye contact, using a firm but

friendly tone, are ways of showing confidence.

vi) Empathy:
Empathy is a skill of being able to understand and share the feelings of another person. Empathy

can be shown with the use of appropriate words or action.

vii) Give and receive feedback:
Giving and receiving appropriate feedback is an essential communication skill. Feedback

helps in improving the performance.

9.7 ROLE OF SECRETARY IN BUSINESS COMMUNICATION:
It is the secretary who has to communicate under various circumstances with the Directors,

officers, employees, outsiders, authorities etc. Secretary has to handle correspondence, draft
notices, reports, minutes, etc.

9.7.1 BUSINESS LETTERS:

• Meaning:

The business letter is a type of written communication written by a Secretary. Good letter
writing is important for maintaining the image of the business.

• Definition:

Robert Shurter defines business correspondence as - “business correspondence is a
message that attempts to influence its recipient to make some action or attitude, desired
by the sender”.

Thus, business letters are written with the objective of not only understanding the contents but
also to take appropriate action or decision.

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q Layout of a business letter:

Layout means proper arrangement of various parts of a letter. Layout of the business letter is
also called the structural design of letter. It is an internal arrangement of matter in a proper way
for creating good impression on reader.

LAYOUT OF BUSINESS LETTER

1) HEADING

NAME AND ADDRESS OF COMPANY

....................................................

....................................................

....................................................
C.I. No . ........................................

Telephone: ........................................ Email: ........................................

Fax: . ........................................ Website : ........................................

3) Reference No. ....................................... 2) Date: .......................................

4) Inside Address

To,
.......................
.......................
.......................

5) Subject:

6) Salutation

7) BODY OF LETTER

A INTRODUCTION

B MAIN PARAGRAPH

C CONCLUDING PARAGRAPH

8) Complimentary Close
9) Signature
10) Enclosure
11) CC.:

• Letter writing is an art. The format of the letter should be visually appealing and correct. In pres-
ent time different alignments are used. e.g. left alignment, right alignment.

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q Layout contains the follwoing parts -

1) Heading:

Heading contains the name, address, telephone number, fax number, e - mail Id, website, CIN
of the company etc. It is that part of business letter which introduces the sender to the receiver.
Usually printed letter heads are used.

E.g. TATA MOTORS LTD.

17C, S.B. ROAD, MIDC

PUNE-411015

CIN - L28920MH1945PLC004520

Telephone- (022) 4756823 FAX-(022)4756824 [email protected]

website-www.tatamotors com


2) Date:

Date is written on the right hand side of the letter just below the heading. Date includes date,
month and year on which letter is typed. Letters without date are incomplete. Date is very
important as letter acts as a legal evidence.

Date is written in different ways:

E.g. British style - 1st April, 2019
American style - April 1st, 2019

3) Reference Number:

It is written on left hand side below the heading. Reference number is given to have quick
reference to the matter concerned. Reference number is a number or word used by the letter
writer. Every outgoing letter is given reference number.

E.g. 91/p/2019

91 - Serial no. of letter, p- Purchase department, 2019- year.

4) Inside address:

It contains name, address of the receiver of the letter. It is written on the left hand side of the
letter. For personal names Mr, Shri, Mrs, or Smt are used and for firms ‘Messer’ is used.

E.g. 1) Mrs. Pallavee Pathare 2) M/s Jagannath Trading Company,
18 ‘A’ Ganesh Complex, Market Yard,
M.G. Road, Sangli - 416436
Ratnagiri 415612

5) Subject:

It is written in brief as ‘Sub’. It shows the purpose of the letter. The Reader gets the idea
of matter of the letter without reading the letter completely. It helps to send it to concerned
section or department and quick filing is possible. Sometimes reference line is also written to
give reference of advertisement, document etc.

E.g. Sub - Opening a Current Account


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6) Salutation:

Salutation is a greeting from the writer to the reader. It creates favourable impression on the
reader’s mind. It appears on the left hand margin below the inside address.

E.g. Dear Sir/Madam
Or Respected Sir/Madam

7) Body of the letter:
It is the most important part of the business letter. It contains actual message for receiver of the

letter. The message should be divided in paragraphs.

First Paragraph

It introduces the subject or matter. It should be brief but effective. It should create interest in
the mind of the reader to go through the contents of the letter.

Main paragraph

It contains the main message of the letter. It is the heart of the letter. Simple language, clarity
and correctness should be reflected in the message. Brevity is the soul of a letter.

Closing paragraph

It is the concluding paragraph. It should be written carefully so that the desired action be taken
by the receiver of the letter.

8) Complimentary close:
This is concluding part of the letter. It is written below the body of letter on right hand side. It

shows polite end of the letter. It should match the salutation.

E.g. Yours faithfully,

9) Signature:

It is a final part of the letter. The authorized person signs below the complimentary close.
A letter without signature is incomplete and invalid. Below the signature, the name of the
person and his or her designation is written. The person who signs, is responsible for the
matter written in the letter.

E.g. Sign

…………………

Name - ………………...

(Designation)

10) Enclosure:

It includes documents, cheques etc. which are attached with the letter. It is shown by the
word ‘Encl’ which is written on left hand side. If documents are more than one it should be
numbered and attached serially. It helps the receiver to check the documents.

E.g. Encl: 1) Copy of board resolution

2) Specimen signature of two directors

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